{"id":22045,"date":"2022-10-05T15:26:20","date_gmt":"2022-10-05T08:26:20","guid":{"rendered":"https:\/\/gapki.id\/en\/?p=22045"},"modified":"2022-10-05T15:26:20","modified_gmt":"2022-10-05T08:26:20","slug":"eu-widens-scope-of-deforestation-free-products","status":"publish","type":"post","link":"https:\/\/gapki.id\/en\/news\/2022\/10\/05\/eu-widens-scope-of-deforestation-free-products\/","title":{"rendered":"EU Widens Scope of Deforestation-Free Products"},"content":{"rendered":"

The European Parliament voted on 13 September 2022 to adopt its position in relation to the European Commission\u2019s proposed regulation on deforestation-free products. The European Parliament\u2019s position would widen the scope of commodities and products covered by the regulation, and subject financial institutions to additional due diligence requirements to ensure that their activities do not contribute to deforestation.<\/p>\n

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The Commission\u2019s proposal on deforestation-free products was initiated in response to the EU Communication (2019) on stepping up EU action to protect and restore the world\u2019s forests, which set out the Commission\u2019s five priorities in relation to deforestation, including reducing the footprint of EU consumption on land and encouraging the consumption of products from deforestation-free supply chains in the EU.<\/p>\n

The commitment in the Communication to \u201cincrease supply chain transparency and minimize the risk of deforestation and forest degradation associated with commodity imports in the EU\u201d was subsequently confirmed in the European Green Deal, and the Commission\u2019s proposal therefore forms an integral measure to deliver on some of the objectives of the European Green Deal.<\/p>\n

As a cornerstone of the proposal, the Commission would prohibit placing on, or exporting from the EU market, those commodities identified as drivers of deforestation \u2014 beef, palm oil, soy, wood, cocoa, and coffee \u2014 and other relevant products (i.e., those that contain, were fed, or made with any of the foregoing commodities) unless those commodities or products are \u201cdeforestation-free\u201d. The European Parliament has instead proposed a broader definition of deforestation-free; where the relevant commodity or product has not been produced on land which has been subject to deforestation, or induced or contributed to forest degradation or forest conversion after a cut-off date of 31 December 2019 (as compared to the Commission\u2019s proposed later cut-off date of 31 December 2020).<\/p>\n

Also, the European Parliament has proposed that the regulation cover additional commodities, including meat from swine, poultry, sheep, and goats, as well as rubber and maize \u201cdue to their impact on global deforestation\u201d, and products, including charcoal, and printed paper products.<\/p>\n

Operators and traders would need to accompany products placed on, or exported from, the EU market with a due diligence statement, and would need to establish due diligence procedures designed to provide access to information regarding the sources and suppliers of the relevant commodities and products. To facilitate due diligence and risk assessment, the regulation would establish a benchmarking system classifying countries as at low, standard, or high risk of producing \u201cnon-compliant\u201d commodities and products.<\/p>\n

The Commission\u2019s proposal was not designed to specifically target the financial and investment sectors on the basis that requirements under existing or previously proposed initiatives \u2014 \u00a0including the EU Taxonomy Regulation, the Corporate Sustainability Reporting Directive, and the Corporate Sustainability Due Diligence Directive \u2014 were sufficient to address the deforestation impacts of these sectors.<\/p>\n

However, the European Parliament considered that all financial institutions\u2019 banking, investment, and insurance activities should fall within the remit of the regulation. Financial institutions would only be able to extend financial services once they had concluded that there was \u201cno more than a negligible risk\u201d that their services could directly or indirectly support activities leading to deforestation, forest degradation, or forest conversion. Financial institutions would also be required to conduct due diligence on their clients, and obtain information on:<\/p>\n